SPHERA FRANCHISE GROUP SA
SEPARATE FINANCIAL STATEMENTS
Prepared in accordance with Order of the Ministry of Public Finance
no. 2844/2016 approving the accounting regulations
compliant with the International Financial Reporting Standards
31 December 2024
SPHERA FRANCHISE GROUP SA
SEPARATE FINANCIAL STATEMENTS
Prepared in accordance with Order of the Ministry of Public Finance no. 2844/2016
31 DECEMBER 2024
CONTENTS
Statement of comprehensive income 2
Statement of financial position 3
Statement of changes in equity 4
Statement of cash flows 5
Notes to the separate financial statements 6 - 37
SPHERA FRANCHISE GROUP SA
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
2
N
Note
2024
2023
Revenues
Dividend revenues
19
94,025
73,003
Revenue from contracts with related parties
19
42,479
40,779
Other income
18
29
Total revenues
136,522
113,811
Expenses
Payroll and employee short-term benefits
35,892
34,433
Impaired loss of investments in subsidiaries
10
2,165
4,369
Other expenses
5
8,293
7,686
Total expenses
46,350
46,488
Profit from operating activities
90,172
67,323
Finance costs
6.1
3,614
4,027
Finance income
6.2
2,327
2,605
Profit before tax
88,885
65,901
Income tax expense
7
165
244
Profit
88,720
65,657
Comprehensive income
88,720
65,657
These separate financial statements from page 2 to page 37 were approved by the Board of Directors and
were authorised for issue on 25 March 2025.
Chief Executive Officer Chief Financial Officer
Calin Ionescu Valentin Budes
SPHERA FRANCHISE GROUP SA
STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
3
Note
31 December
2024
31 December
2023
Assets
Non-current assets
706,994
702,814
Property, plant and equipment
8
1,278
1,546
Right-of-use assets
12
4,064
4,552
Intangible assets
9
654
651
Investments in subsidiaries
10
663,899
665,639
Loan and other receivables
14
37,016
30,192
Deferred tax asset
7
83
234
Current assets
36,630
42,286
Trade and other current receivables (including short-term
loans)
14
23,669
39,233
Current prepayments
505
156
Cash and cash equivalents
15
12,456
2,897
Total assets
743,624
745,100
Equity and liabilities
Equity
Issued capital
16
581,990
581,990
Treasury shares
19
(4,789)
(2,037)
Legal reserve
18,331
13,894
Retained earnings
17
92,773
89,933
Reserves for share-based remuneration
19
3,686
3,894
Total equity
691,991
687,674
Non-current liabilities
33,895
40,056
Long-term borrowings
11
30,856
36,321
Non-current lease liabilities
12
3,039
3,735
Current liabilities
17,738
17,370
Short-term borrowings
11
7,496
7,765
Current lease liabilities
12
1,416
1,240
Trade and other current payables
18
8,521
8,060
Provisions
5
305
305
Total liabilities
51,633
57,426
Total equity and liabilities
743,624
745,100
These separate financial statements from page 2 to page 37 were approved by the Board of Directors and
were authorised for issue on 25 March 2025.
SPHERA FRANCHISE GROUP SA
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
4
Issued
capital
Treasury
shares
Reserves for
share-based
remuneration
Legal
reserves
Retained
earnings
Total
equity
As of 1 January 2024
581,990
(2,037)
3,894
13,894
89,933
687,674
Profit
-
-
-
-
88,720
88,720
Total comprehensive
income
-
-
-
-
88,720
88,720
Acquisition of treasury shares
(Note 16 and Note 19)
-
(4,789)
-
-
-
(4,789)
Shares granted (Note 19)
-
2,037
(2,037)
-
-
-
Share-based remuneration
(Note 19)
-
-
1,829
-
-
1,829
Legal reserves
-
-
-
4,437
(4,437)
-
Dividends declared (Note 17)
-
-
-
(81,443)
(81,443)
As of 31 December 2024
581,990
(4,789)
3,686
18,331
92,773
691,991
Issued
capital
Treasury
shares
Reserves for
share based
remuneration
Legal
reserves
Retained
earnings
Total
equity
As of 1 January 2023
581,990
-
1,502
10,611
72,932
667,034
Profit
-
-
-
-
65,657
65,657
Total comprehensive
income
-
-
-
-
65,657
65,657
Acquisition of treasury shares
-
(2,037)
-
-
-
(2,037)
Share-based remuneration
(Note 19)
-
-
2,392
-
-
2,392
Loss related to acquisition of
treasury shares
-
-
-
(487)
(487)
Legal reserves
-
-
-
3,283
(3,283)
-
Dividends declared (Note )
-
-
-
(44,886)
(44,886)
As of 31 December 2023
581,990
(2,037)
3,894
13,894
89,933
687,674
The share capital has not suffered any changes during 2024 and 2023.
These separate financial statements from page 2 to page 37 were approved by the Board of Directors
and were authorised for issue on 25 March 2025.
SPHERA FRANCHISE GROUP SA
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
5
Note
2024
2023
Operating activities
Profit before tax
88,885
65,901
Adjustments to reconcile profit before tax to net cash
flows:
Dividend revenue
19
(94,025)
(73,003)
Depreciation, amortization and impairment
5
1,995
1,973
Impairment loss of investments in subsidiaries
10
2,165
4,369
Adjustments for unrealized foreign exchange
losses/(gains)
(7)
(28)
(Gain)/loss on disposal of property, plant and
equipment
(8)
(18)
Share-based remuneration
1,404
1,856
Adjustments for finance income
6.2
(2,327)
(2,605)
Adjustments for finance costs (interest)
6.1
3,596
3,941
Movements in provisions, net
-
305
Working capital adjustments:
Adjustments for increase in trade and other receivables
and prepayments
(4,777)
(7,906)
Adjustments for decrease in trade and other payables,
including employee benefits
(1,159)
(852)
Dividends received
114,109
71,526
Interest received
341
1,201
Interest paid
(1,609)
(4,100)
Income tax paid
(23)
-
Cash flows from operating activities
108,560
62,560
Investing activities
Proceeds from sale of property, plant and equipment
178
29
Purchase of property, plant and equipment and
intangible assets
(561)
(668)
Loans to related parties
(4,960)
-
Cash flows used in investing activities
(5,343)
(639)
Financing activities
Acquisition of treasury shares
(4,789)
(2,037)
Repayment of borrowings
11
(7,714)
(20,392)
Payment of lease liabilities
12
(1,371)
(1,377)
Net dividends paid
(79,784)
(63,751)
Cash flows used in financing activities
(93,658)
(87,557)
Net increase in cash and cash equivalents
9,559
(25,636)
Cash and cash equivalents at 01 January
2,897
28,533
Cash and cash equivalents at 31 December
12,456
2,897
These separate financial statements from page 2 to page 37 were approved by the Board of Directors
and were authorised for issue on 25 March 2025.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
6
1. REPORTING ENTITY
Sphera Franchise Group SA (‘’Sphera’’ or “the Company”) was incorporated on 16 May 2017 as a joint
stock company and is registered at No. 239 Calea Dorobanti, Bucharest, Romania. The Company
renders management and support services such as marketing, development, sales support, human
resources and other services to its subsidiaries. Sphera Franchise Group SA is listed on Bucharest
Stock Exchange under the symbol “SFG”.
As at 31 December 2024 and 31 December 2023, the Company has the following subsidiaries:
Company name
Country of
incorporation
Field of activity
Share
interest %
Brand
US Food Network SA
KFC
Romania
Restaurants
99.9997%
American Restaurant System SA
Pizza Hut
Romania
Restaurants
99.9997%
California Fresh Flavors SRL
Taco Bell
Romania
Restaurants
99.9900%
US Food Network SRL
KFC
Moldova
Restaurants
80.0000%
US Food Network SRL
KFC
Italy
Restaurants
100.0000%
Choco Franchise SRL (subsidiary
of US Food Network Srl (Italy))
Cioccolatitaliani
Italy
Restaurants
100.0000%
Sphera Franchise Group SA together with its subsidiaries are referred hereinafter as ‘’SFG’’ or ‘’the
Group’’.
The Group operates quick service and takeaway restaurant concepts (a chain of 128 restaurants as at
31 December 2024) under the Kentucky Fried Chicken (‘’KFC’’), spread across Romania as well as in
the Republic of Moldova and in Italy. The Group also operates in Romania a chain of 28 pizza
restaurants and one sub-franchise under the Pizza Hut (“PH”) brand, and a chain of 16 restaurants
under the “Taco Bell” brand.
As at 31 December 2024, the Company has a total number of 174 employees (2023:177).
The separate financial statements for the year ended 31 December 2024 were authorized for issue in
accordance with the resolution of the Board of Directors dated 25 March 2025.
2. MATERIAL ACCOUNTING POLICIES
The following are the material accounting policies applied by the Company in preparing its separate
financial statements.
2.1 Statement of Compliance
The separate financial statements (“financial statements”) of the Company have been prepared in
accordance with the provisions of the Ministry of Finance Order no. 2844/2016 approving the
accounting regulations compliant with the International Financial Reporting Standards, with all
subsequent modifications and clarifications.
The Ministry of Public Finance Order no. 2844/2016, with subsequent amendments, is in accordance
with the International Financial Reporting Standards (IFRS Accounting Standards) adopted by the
European Union (EU), except for IAS 21 The effects of changes in foreign exchange rates regarding
functional currency, except for the provisions of IAS 20 Accounting for Government Grants regarding
the recognition of revenue from green certificates, except for the provisions of IFRS 15 Revenue from
contracts with customers regarding the revenue from taxes of connection to the distribution grid.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
7
2. MATERIAL ACCOUNTING POLICIES (continued)
The Company also prepares consolidated financial statements in accordance with Order of Public
Finance Ministry no. 2844/2016 (with subsequent modifications), for approval of accounting regulation
in accordance with International Financial Reporting Standards applicable to entities which are listed
on stock exchanges.
During the current year the Company has a net profit of RON 88,720 thousand and has a net current
assets position of RON 18,892 thousand. As at 31 December 2024, the Company holds a cash and
cash equivalent balance of RON 12,456 thousand and has available RON 74,101 thousand undrawn
bank facilities, thus being able to respond to any unforeseen higher cash outflow needs.
The Company’s main revenues refer to management services and other support function services
provided to its operating subsidiaries (i.e. its customers) and receives dividends from investments in
these subsidiaries.
During the current year, the Group, which the Company is part of, made a net profit of RON 97,387
thousand and had a net current liability position of RON 119,490 thousand. The Group holds a cash
and cash equivalent balance of RON 115,764 thousand and has undrawn bank facilities of RON 93,298
thousand as at 31 December 2024, thus being able to respond to any unforeseen higher cash outflow
needs.
The management, based their assessment on the Group’s detailed cash flow projections for the period
up to 31 December 2025, that take into account the current available cash resources of the Group as
of 31 December 2024, the contracts in place in relation to rental expenses, anticipated additional
expenses from new lease agreements to be concluded during the period covered by the projections,
as well as contracted debt financing and the current classification of loans at the reporting date, CAPEX
and other commitments.
In making the assessment about whether the going concern basis of preparation is appropriate,
management considered the following factors:
• The Group’s and the Company’s current and expected profitability
• The timing of repayment of existing financing facilities
The ongoing war in Ukraine and the related sanctions targeted against the Russian Federation have a
continuous impact on the European economies and globally. The entity does not have any significant
direct exposure to Ukraine, Russia or Belarus. However, the impact on the general economic situation
may require timely revisions of certain assumptions and estimates (cost of energy, cost of raw materials
and the overall impact of inflation pressure).
In October 2023, a conflict between Israel and Palestine arose leading to significant casualties and
local destruction. However, in January 2025, a ceasefire was mediated for bringing this conflict to an
end. The Company does not have any significant direct exposure to Israel or Palestine and the
management does not expect to have a significant impact over the Company operations.
The projections show that the Company has sufficient resources to continue to fund ongoing operations
and asset development therefore concluded that the going concern basis of preparation is appropriate
and no material uncertainties exists.
2.2 Basis of preparation
The separate financial statements have been prepared on a on a historical cost basis, using going
concern principle. The separate financial statements are presented in Romanian Lei (‘’RON’’) and all
values are rounded to the nearest thousand RON, except when otherwise indicated. Accordingly, there
may be rounding differences.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
8
2. MATERIAL ACCOUNTING POLICIES (continued)
2.3 Summary of material accounting policies
2.3.1 Current versus non-current classification
The Company presents assets and liabilities in the statement of financial position based on
current/non-current classification. An asset is current when it is:
➢ Expected to be realised or intended to be sold or consumed in the normal operating cycle
➢ Held primarily for the purpose of trading
➢ Expected to be realised within twelve months after the reporting period, or
➢ Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
➢ It is expected to be settled in the normal operating cycle
➢ It is held primarily for the purpose of trading
➢ It is due to be settled within twelve months after the reporting period, or
➢ It does not have the right at the end of the reporting period to defer the settlement of the liability
for at least twelve months after the reporting period
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
2.3.2 Fair value measurement
Fair value related disclosures for financial instruments and non-financial assets that are summarised
in the relevant notes.
The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy. This is described, as follows, based on the lowest level input
that is significant to the fair value measurement as a whole:
➢ Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
➢ Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
➢ Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities
on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value
hierarchy, as explained above.
2.3.3 Revenue
Rendering of services
The Company is engaged in providing management and other support function services to its operating
subsidiaries (i.e. its customers).
Revenue from these contracts is recognised when control of services is transferred to the customer at
an amount that reflects the consideration to which the Company expects to be entitled in exchange for
those services.
The Company recognises revenue from these services over time, as it progresses towards complete
satisfaction of the service, because the customer simultaneously receives and consumes the benefits
provided by the Company.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
9
2. MATERIAL ACCOUNTING POLICIES (continued)
If the contracts include fees for various activities performed, revenue is recognised in the amount to
which the Company has a right to invoice.
Revenues related to services rendered are recognised in the period in which the services were
rendered based on statements of work performed, regardless of when paid or received, in accordance
with the accrual basis.
Dividend income
Dividend revenue from investments is recognized when the shareholder’s right to receive payment
has been established which is when shareholders approve the dividend.
Interest income
Interest income is recorded using the effective interest rate (EIR). The EIR is the rate that exactly
discounts the estimated future cash receipts through the expected life of the financial instrument or a
shorter period, where appropriate, to the net carrying amount of the financial asset. Interest income is
included in ‘’Finance income’’ in profit or loss.
2.3.4 Foreign currencies
The Company’s separate financial statements are presented in Romanian New Lei (‘’RON’’), which is
the Company’s functional currency.
Transactions and balances
Foreign currency transactions are recorded at the exchange rate ruling on transaction date. Monetary
assets and liabilities expressed in foreign currency are translated into RON at the exchange rate on
the reporting date, communicated by the National Bank of Romania:
The exchange rates as at 31 December 2024 and 31 December 2023 and the average exchange rates
for the years 2024 and 2023 were:
Closing exchange rates
Average exchange rates
31 December 2024
31 December
2023
2024
2023
RON – EUR
4.9741
4.9746
4.9746
4.9465
RON – USD
4.7768
4.4958
4.5984
4.5743
RON – MDL
0.2576
0.2570
0.2584
0.2520
Differences arising on settlement or translation of monetary items are recognised in profit or loss.
2.3.5 Taxes
Current income tax
Current income tax assets and liabilities for the current period are measured at the amount expected
to be recovered from or paid to the taxation authorities, using tax rates enacted or substantively
enacted at the reporting date. Taxable profit differs from profit as reported in the income statement
because it excludes items of income or expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible.
Management periodically evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation, and it establishes provisions where appropriate.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
10
2. MATERIAL ACCOUNTING POLICIES (continued)
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
• When the deferred tax liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss
• In respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint arrangements, when the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not reverse
in the foreseeable future.
Deferred tax assets are recognised for: all deductible temporary differences and the carry forward of
unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, the carry forward of unused tax credits
and any unused tax losses that can be utilised, except:
• When the deferred tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and,
at the time of the transaction, affects neither the accounting profit nor taxable profit or loss, no
deferred tax is recognized, and
• In respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint arrangements, deferred tax assets are recognised only to the
extent that it is probable that the temporary differences will reverse in the foreseeable future
and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of
the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each
reporting date and are recognised to the extent that it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date.
Sales tax (VAT and similar taxes)
Revenues, expenses and assets are recognised net of the amount of sales tax, except:
• Where the sales tax incurred on a purchase of assets or services is not recoverable from the
taxation authority, in which case, the sales tax is recognised as part of the cost of acquisition
of the asset or as part of the expense item, as applicable
• Receivables and payables are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part
of receivables or payables in the statement of financial position.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
11
2. MATERIAL ACCOUNTING POLICIES (continued)
2.3.6 Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-
term leases and leases of low value assets. The Company recognises lease liabilities to make lease
payments and right-of-use assets representing the right to use the underlying assets.
i) Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date
the underlying asset is available for use). Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or before the commencement date less any lease
incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the
lease term and the estimated useful lives of the assets, as follows:
Right of use of buildings and leasehold
improvements
3 to 10 years
Right-of-use assets of plant and machinery
(motor vehicles and other equipment)
3 to 5 years
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of
the asset.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable
certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated
over the shorter of the estimated useful life of the asset and the lease term.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in section
Impairment of non-financial assets.
ii) Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the
present value of lease payments to be made over the lease term. The lease payments include fixed
payments (including in substance fixed payments) less any lease incentives receivable, and amounts
expected to be paid under residual value guarantees. The lease payments also include the payments
of penalties for terminating the lease, if the lease term reflects the Company exercising the option to
terminate.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate
at the lease commencement date because the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments made. In addition, the carrying amount of
lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the
lease payments (e.g., changes to future payments resulting from a change in an index or rate used to
determine such lease payments) or a change in the assessment of an option to purchase the underlying
asset.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
12
2. MATERIAL ACCOUNTING POLICIES (continued)
The Company performs a remeasurement of the lease liability upon the occurrence of certain events
(e.g., a change in the lease term, a change in future lease payments resulting from a change in an
index or rate used to determine those payments). The amount of the remeasurement of the lease
liability is recognized as an adjustment to the right-of-use asset i.e. with no impact on income
statement.
iii) Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases of machinery
and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement
date and do not contain a purchase option). It also applies the lease of low-value assets recognition
exemption to leases of office equipment that are considered to be low value. Lease payments on short-
term leases and leases of low value assets are recognised as expense on a straight-line basis over
the lease term.
2.3.7 Impairment of non-financial assets
At each reporting date, management assesses whether there is any indication of impairment for
property, plant and equipment or intangible assets. If any such indication exists, management
estimates the recoverable amount, which is determined as the higher of an asset’s fair value less costs
to sell and its value in use. The carrying amount is reduced to the recoverable amount, and the
difference is recognised as an expense (impairment loss) in the statement of comprehensive income.
An impairment loss recognised for an asset in prior years is reversed if there has been a change in the
estimates used to determine the asset’s recoverable amount. An impairment loss is reversed only to
the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
2.3.8 Investments in subsidiaries
In the Company’s financial statements, the investments in subsidiaries are accounted for at cost in
accordance to IAS 27 “Separate financial statements”.
At each reporting date, management assesses whether there is any indication of impairment over
investments in subsidiaries. If any such indication exists, management estimates the recoverable
amount, which is determined as the higher of an asset’s fair value less costs to sell and its value in
use. The carrying amount is reduced to the recoverable amount, and the difference is recognised as
an expense (impairment loss) in profit or loss. An impairment loss recognised in prior years is reversed
if there has been a change in the estimates used to determine the investment’s recoverable amount.
An impairment loss is reversed only to the extent that the investment’s carrying amount does not
exceed the carrying amount that would have been determined if no impairment loss had been
recognised.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
13
2. MATERIAL ACCOUNTING POLICIES (continued)
2.3.9 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
i) Financial assets
Initial recognition and measurement
Financial assets are classified that are debt instruments, at initial recognition, as subsequently
measured at amortised cost.
With the exception of trade receivables that do not contain a significant financing component, the
Company initially measures a financial asset at its fair value plus transaction costs. Trade receivables
that do not contain a significant financing component or for which the Company has applied the
practical expedient are measured at the transaction price determined under IFRS 15.
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Company. The Company measures financial assets at
amortised cost if both of the following conditions are met:
• The financial asset is held within a business model with the objective to hold financial assets in order
to collect contractual cash flows; and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding;
Financial assets at amortised cost are subsequently measured using the effective interest (EIR)
method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset
is derecognised, modified or impaired.
The Company’s financial assets are represented by loans, trade and other receivables and cash and
cash equivalents. For more information on receivables, refer to Note 14. Receivables due in less than
12 months are not discounted.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e., removed from the Company’s statement of financial position)
when the Company has transferred substantially all the risks and rewards of the asset.
Impairment of financial assets
The Company recognizes an allowance for expected credit losses (ECLs) for all debt instruments not
held at fair value through profit or loss. ECLs are based on the difference between the contractual cash
flows due in accordance with the contract and all the cash flows that the Company expects to receive,
discounted at an approximation of the original effective interest rate.
The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
For trade receivables, the Company applies a simplified approach in calculating ECLs. Therefore, the
Company does not track changes in credit risk, but instead recognizes a loss allowance based on
lifetime ECLs at each reporting date. The Company has established a provision methodology that is
based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors
and the economic environment.
Disclosures relating to impairment of financial assets are summarised in the Note 14 - Trade
receivables.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
14
2. MATERIAL ACCOUNTING POLICIES (continued)
ii) Financial liabilities
Initial recognition and measurement
All financial liabilities are recognised initially at fair value and, in the case of financial liabilities measured
at amortised cost, net of directly attributable transaction costs.
The Company’s financial liabilities include only financial liabilities measured at amortised cost (trade
and other payables, lease liabilities and loans and borrowings).
Subsequent measurement
After initial recognition, interest bearing loans and borrowings and any other long-term payables are
subsequently measured at amortised cost using the effective interest rate method. Gains and losses
are recognised in profit or loss when the liabilities are derecognised as well as through the effective
interest rate method (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in profit
or loss.
De-recognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a de-recognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognised in profit or loss.
Trade and other payables with a maturity of 12 months or less are not discounted.
2.3.10 Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at banks and on hand,
cash in transit and demand deposits.
2.3.11 Equity
Share capital
Ordinary shares are classified as equity. External costs directly attributable to the issue of new shares
are shown as a deduction in equity from the proceeds. Any excess or deficit of the fair value of
consideration received over the par value of shares issued is recognised as share premium.
Dividends
The Company recognises a liability to make cash or non-cash distributions to owners of equity when
the distribution is authorised and the distribution is no longer at the discretion of the Company. As per
the corporate laws of Romania, a distribution is authorised when it is approved by the shareholders. A
corresponding amount is recognised directly in equity.
Legal reserves
The company sets its legal reserves under the Companies Law, which requires that 5% of the annual
accounting profit before taxes is transferred to „Legal Reserves” until the balance of this reserve
reaches the threshold of 20% of share capital. Legal reserves are not distributable.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
15
2. MATERIAL ACCOUNTING POLICIES (continued)
Treasury shares
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted
from equity. No gain or loss is recognized in profit or loss on the purchase, the difference between the
purchase price and the fair value at the date of grant being recognized in equity as a gain or loss related
to the acquisition of the treasury shares.
2.3.12 Provisions
General
Provisions are recognised when the Company has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax
rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the
increase in the provision due to the passage of time is recognised as a finance cost.
2.3.13 Employee benefits and share-based remuneration
The Company, in the normal course of business, makes payments on behalf of its employees for
pensions (defined contribution plans), health care, employment and personnel tax which are calculated
according to the statutory rates in force during the year, based on gross salaries and wages.
Food allowances, travel expenses and holiday allowances are also calculated according to the local
legislation.
The cost of these payments is charged to the statement of comprehensive income in the same period
as the related salary cost. Accruals are created for holiday allowances if there are non-used holidays
according to the local legislation.
The Company does not operate any other pension scheme or post-retirement benefits plan and
consequently, has no obligation in respect of pensions.
Share-based payments
Senior executives of the Group might receive part of their variable remuneration in the form of share-
based payments. The cost of equity-settled transactions with senior management is measured by
reference to awarding fair value at the grant date. That cost is recognised in employee benefits expense
together with a corresponding increase in equity (other capital reserves), over the period in which the
performance conditions are fulfilled (the vesting period). The expense or credit in the statement of profit
or loss for a period represents the movement in cumulative expense recognised as at the beginning
and end of that period.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying
amount of asset or liability affected in future periods.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
16
3. MATERIAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)
Judgements
In the process of applying the Company’s accounting policies, management has made no judgement
with significant effect on the amounts recognised in the financial statements during 2024.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year, are described below.
The Company based its assumptions and estimates on parameters available when the financial
statements were prepared. Existing circumstances and assumptions about future developments,
however, may change due to market changes or circumstances arising beyond the control of the
Company. Such changes are reflected in the assumptions when they occur.
Recoverability of investments in subsidiaries and loans to subsidiaries
The Company assesses the recoverability of investments in subsidiaries and loans to subsidiaries at
least at each financial year-end. The determination of recoverable amounts of the Company’s
investments in subsidiaries relies on management’s estimates of future cash flows, for which some of
the main assumptions were future restaurants opening, growth rates, gross and net operating margins,
working capital needs, capital expenditure and discount rates, as well as economic assumptions such
as the evolution of salaries in the economy and inflation.
The key assumptions used to determine the recoverable amount for the investment in subsidiaries and
loans to subsidiaries, including a sensitivity analysis, are disclosed and further explained in Note 10.
4. CHANGES IN ACCOUNTING POLICIES
4.1 CHANGES IN ACCOUNTING POLICIES FROM 1 JANUARY 2024
The accounting policies adopted are consistent with those of the previous financial year except for the
following amended IFRS Accounting Standards which have been adopted by the Company as of 1
January 2024:
• IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current and Non-
current (Amendments)
• IFRS 16 Leases: Lease Liability in a Sale and Leaseback (Amendments)
• IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosures – Supplier
Finance Arrangements (Amendments).
These newly adopted IFRS accounting standards and amendments to IFRS Accounting Standards did
not have a material impact on the Company’s accounting policies.
4.2 NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS ISSUED BUT NOT YET
EFFECTIVE FOR THE FINANCIAL YEAR BEGINNING 1 JANUARY 2024 AND NOT EARLY
ADOPTED
The standards and interpretations that are issued, but not yet effective, up to the date of issuance of
the Company’s financial statements are disclosed below. The Company intends to adopt these
standards, if applicable, when they become effective.
i) The standards/amendments that are not yet effective, but have been endorsed by the European
Union:
• IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability
(Amendments)
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
17
4. CHANGES IN ACCOUNTING POLICIES (continued)
ii) The standards/amendments that are not yet effective and have not yet been endorsed by the
European Union:
• IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Classification
and Measurement of Financial Instruments (Amendments).
• IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Contracts
Referencing Nature-dependent Electricity (Amendments).
• IFRS 18 Presentation and Disclosure in Financial Statements.
IFRS 18 introduces new requirements on presentation within the statement of profit or loss. It
requires an entity to classify all income and expenses within its statement of profit or loss into
one of the five categories: operating; investing; financing; income taxes; and discontinued
operations. These categories are complemented by the requirements to present subtotals and
totals for ‘operating profit or loss’, ‘profit or loss before financing and income taxes’ and ‘profit
or loss’. It also requires disclosure of management-defined performance measures and
includes new requirements for aggregation and disaggregation of financial information based
on the identified ‘roles’ of the primary financial statements and the notes. In addition, there are
consequential amendments to other accounting standards. IFRS 18 is effective for reporting
periods beginning on or after January 1, 2027, with earlier application permitted. Retrospective
application is required in both annual and interim financial statements. In the following reporting
periods, Management will analyse the requirements of this newly issued standard and assess
its impact.
• IFRS 19 Subsidiaries without Public Accountability: Disclosures.
• Annual Improvements to IFRS Accounting Standards – Volume 11.
• Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in
Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture.
Except IFRS 18, management has assessed that application of these amendments and new standards
will not have a material impact on the financial statements of the Company.
5. OTHER EXPENSES
2024
2023
Third-party services
4,540
3,902
Depreciation and amortization
1,995
1,973
Insurance
55
97
Travel expenses
693
589
Office supplies
174
162
Maintenance and repairs
73
151
Other taxes
139
124
Advertising
316
118
Rental expenses
113
80
Banking charges
39
35
Utilities
52
58
Miscellaneous expenses
104
92
Other provisions for risks and charges - expense
-
305
Total
8,293
7,686
The depreciation and amortization expenses presented here are netted off with the amounts related
to income from subsidies received (RON 8 thousand for the year 2024 and RON 8 thousand for the
year 2023).
Third party services include mainly audit services, consulting services, IT services, and HR services.
For the year 2023, other provisions refer to a legal action by a former non-executive director of the
Company whose mandate was terminated before term, not re-elected by the General Assembly of
Shareholders (RON 305 thousand).
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
18
6. FINANCE COSTS AND INCOME
6.1 Finance costs
2024
2023
Interest on debts and borrowings and bank charges related to financing
1,433
2,128
Interest on lease liabilities
188
180
Interest on loans from related parties (Note 19)
1,975
1,633
Foreign exchange loss
18
86
Total finance costs
3,614
4,027
6.2 Finance income
2024
2023
Interest income from loans to related parties (Note 19)
1,965
1,177
Interest income from banks
331
1,428
Other finance income
31
-
Total finance income
2,327
2,605
7. INCOME TAX
The major components of income tax for the years ended 31 December 2024 and 31 December
2023 are:
2024
2023
Current income tax:
Income tax expense
165
-
Current income tax charge
14
-
Deferred tax:
Relating to fiscal losses carried forward
151
244
Income tax expense reported in the statement of comprehensive
income
165
244
A reconciliation between tax expense and the accounting profit multiplied by the tax rate for the years
ended 31 December 2024 and 31 December 2023 is as follows:
2024
2023
Accounting profit before income tax
88,885
65,901
At Romanian statutory income tax rate of 16%
14,222
10,544
Dividend income and legal reserves exempted from tax
(15,755)
(12,279)
Non-deductible expenses for tax purposes
1,615
2,024
Unusable tax losses carried forward
83
(45)
At the effective income tax rate
165
244
Deferred tax
Deferred tax reconciliation with corresponding items in the statement of financial position and
statement of comprehensive income is as follows:
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
19
7. INCOME TAX (continued)
Statement of
financial
position
Statement of
comprehensive
income
31 December 2024
2024
Current income tax charge
14
Fiscal losses carried forward
83
151
Deferred tax expense
165
Net deferred tax assets
83
Statement of
financial
position
Statement of
comprehensive
income
31 December 2023
2023
Fiscal losses carried forward
234
244
Deferred tax expense
244
Net deferred tax assets
234
The deferred tax asset of RON 83 thousand (31 December 2023: RON 234 thousand) arose from the
tax losses carried forward in amount of RON 520 thousand, which are available for offsetting against
the Company’s future tax profits within the next two years (i.e. five years from the recognition, according
to the Romanian tax law).
8. PROPERTY, PLANT AND EQUIPMENT
Leasehold
improvements
Plant and
machinery
Other
equipment
Construction
in progress
Total
Cost
At 1 January 2023
2,211
189
1,589
19
4,008
Additions
25
17
285
289
616
Disposals
-
17
-
308
325
At 31 December 2023
2,236
189
1,874
-
4,299
Additions
7
-
178
-
185
Disposals
-
-
53
-
53
At 31 December 2024
2,243
189
1,999
-
4,431
Depreciation
At 1 January 2023
945
144
1,162
-
2,251
Depreciation charge
225
26
268
-
519
Disposals
-
17
-
-
17
At 31 December 2023
1,170
153
1,430
-
2,753
Depreciation charge
227
24
201
-
452
Disposals
-
-
52
-
52
At 31 December 2024
1,397
177
1,579
-
3,153
Net Book Value
At 1 January 2023
1,266
45
427
19
1,757
At 31 December 2023
1,066
66
414
-
1,546
At 31 December 2024
846
12
420
-
1,278
The additions during the year ended 31 December 2024 consisted mainly in office computers and other
office equipment.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
20
9. INTANGIBLE ASSETS
Software,
licenses
Total
Cost
At 1 January 2023
955
955
Additions
366
366
At 31 December 2023
1,321
1,321
Additions
214
214
At 31 December 2024
1,535
1,535
Amortisation
At 1 January 2023
505
505
Amortisation
165
165
At 31 December 2023
670
670
Amortisation
211
211
At 31 December 2024
881
881
Net book value
At 1 January 2023
450
450
At 31 December 2023
651
651
At 31 December 2024
654
654
10. INVESTMENTS IN SUBSIDIARIES
Details of the investments in subsidiaries at 31 December 2024 are as follows:
Company name
Country of
incorpora-
tion
Field of
activity
Share
interest
percent
Investment
at cost
Impairment
Carrying
value
US Food Network SA
(‘USFN’)
Romania
Restaurants
99.9997%
520,013
-
520,013
American Restaurant
System SA (‘ARS’)
Romania
Restaurants
99.9997%
114,568
66,844
47,724
California Fresh
Flavors SRL (‘CFF’)
Romania
Restaurants
99.9900%
16,528
-
16,528
US Food Network SRL
(‘USFN Moldova’)
Moldova
Restaurants
80.0000%
1,735
-
1,735
US Food Network SRL
(‘USFN Italy’)
Italy
Restaurants
100.0000%
77,899
-
77,899
Total
730,743
66,844
663,899
Details of the investments in subsidiaries at 31 December 2023 are as follows:
Company name
Country of
incorpora-
tion
Field of
activity
Share
interest
percent
Investment
at cost
Impairment
Carrying
value
US Food Network SA
(‘USFN’)
Romania
Restaurants
99.9997%
519,704
-
519,704
American Restaurant
System SA (‘ARS’)
Romania
Restaurants
99.9997%
114,452
64,679
49,773
California Fresh
Flavors SRL (‘CFF’)
Romania
Restaurants
99.9900%
16,528
-
16,528
US Food Network SRL
(‘USFN Moldova’)
Moldova
Restaurants
80.0000%
1,735
-
1,735
US Food Network SRL
(‘USFN Italy’)
Italy
Restaurants
100.0000%
77,899
-
77,899
Total
730,318
64,679
665,639
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
21
10. INVESTMENTS IN SUBSIDIARIES (continued)
In 2024, the Company increased the investment in USFN with the amount of RON 309 thousand and
the investment in ARS with the amount of RON 116 thousand, representing the value of its own
treasury shares that are to be granted to the management of subsidiaries, as part of the share-based
payment program. At the same time, the impairment for the investment with ARS has increased by
RON 2,165 thousand.
In 2023, it was increased the value of the investments in subsidiaries American Restaurant System SA
and California Fresh Flavors SRL by conversion of the existing shareholder debts to equity (share
capital and share premium) and cash contribution from the minority shareholder. SFG has contributed
RON 9,333 thousand to the increase of ARS equity and with the amount of RON 4,100 thousand to
the increase of CFF equity.
The shareholding structure of the subsidiaries remained unchanged.
As of December 31, 2024 and 2023, the Company assessed whether there are indicators of impairment
for its cost of investment in subsidiaries, as follows:
- USFN Romania, USFN Moldova, USFN Italy and CFF’s activities in 2024 and 2023 have
registered a very good performance, almost in line with the cash flow projections; all
subsidiaries are in a profit position; therefore no impairment indicators were identified.
- Pizza Hut (ARS)’s performance in 2024 and 2023 was below the cash flow projections, the
subsidiary going through a period of transformation aimed to improve the agility of the brand
and the performance indicators. Management estimated the recoverable amount of the
investment at RON 59,606 thousand (2023: RON 54,608 thousand) based on fair value less
costs to sell determined using forecasted free cash-flows in RON for a discrete period of 5
years (2025-2029). The terminal value was estimated based on the net cash-flow of the year
following the explicit forecast period and using a 3% growth factor. (This fair value
measurement is on level 3 of the fair value hierarchy).
The cashflow projections are based on financial budgets approved by senior management covering
the above-referred period.
Impairment test for Pizza Hut (ARS)
The key assumptions used in the calculation of the recoverable amounts are sales growth rates,
EBITDA margins, discount rates, net working capital and terminal value growth rates. Capital
expenditure/restaurant is also a key assumption. The values assigned to these key assumptions reflect
past experience and a number of actions already implemented with the purpose to improve the brand
performance: the streamlining of restaurant network (started in Q3 2023 and finalized in Q3 2024), a
tighter control of costs (restaurant payroll, rent, other operating expenses, general and administrative
costs), outsourcing of the own delivery fleet, increase of operational efficiency, launching new products.
Discount rate (post tax) used is 12.7% (2023: 12.6%). The discount rate reflects the current market
assessment of the risks specific to ARS and was estimated based on the weighted average cost of
capital for the industry. This rate was further adjusted to reflect the market assessment of any risk
specific to ARS for which further estimates of cash-flows have not been adjusted. The WACC was
determined by taking into account the debt equity structure of the peers.
The Company considers the sales growth rates used in the impairment test to be reasonable, based
on the measures it has undertaken to support sales, including the level of selling prices and alignment
of its sales channels and the recent evolution of Pizza Hut restaurants.
Budget EBITDA margins are based on the following assumptions:
- Improving the current profitability for the existing restaurants as a result of the restaurants
network optimization plan started in Q3 2023 and finalized in the third quarter of 2024, by
closing the stores in the same geographical area and routing a major part of sales to the
remaining ones.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
22
10. INVESTMENTS IN SUBSIDIARIES (continued)
- Increased effectiveness of the delivery activity by outsourcing the own delivery fleet which
allowed costs optimization in terms of personnel, other operating expenses (own fleet costs);
The rest of the main expense categories trend will be relatively constant as percentage of
sales.
- Strengthening the operating performance of the existing network, no new units assumed to be
opened or closed for 2025-2029 period.
- Launching new products.
As a result of the analysis, as compared to the investment carrying value of RON 114,568 thousand
(RON 114,452 thousand as at December 31, 2023) and also considering the other receivables with
ARS of RON 12,008 thousand (RON 4,835 thousand as at December 31, 2023) and the accumulated
impairment loss already recognized in the financial statements as at and for the year ended 31
December 2023 of RON 64,679 thousand, there was a decrease of the investment’s recoverable
amount of additional RON 2,165 thousand (RON 4,369 thousand for year 2023) for which the Company
recognized an impairment loss in the financial statements as at and for the year ended 31 December
2024. This impairment loss may be reversed in the future financial years, subject to improving
performance of the subsidiary.
With regard to the assessment of impairment, management believes that the model is most sensitive
to:
• cost of capital (WACC)
• terminal growth assumptions
• EBITDA margin
• Net working capital (NWC)
EBITDA margin reflects management’s estimates regarding the operational profitability of ARS, in line
with historical levels and market evolution (and is not disclosed due to the strategic nature of this
information).
Key drivers
Key drivers (%)
Fair value less cost
to sell
(Impairment) /
Headroom
Cost of capital
12.7%
59,606
(2,165)
13.2%
56,271
(5,500)
12.2%
63,310
1,539
EBITDA margin
0.00%
59,606
(2,165)
-0.50%
57,174
(4,597)
0.50%
62,038
267
Perpetuity growth factor
3.00%
59,606
(2,165)
2.50%
56,407
(5,364)
3.50%
63,153
1,382
Net working capital (%/sales)
0.0 pp
59,606
(2,165)
-0.5pp
60,394
(1,377)
+0.5pp
58,818
(2,953)
For 2023:
Key drivers
Key drivers (%)
Fair value less cost
to sell
Impairment /
Headroom
Cost of capital
12.6%
54,608
(4,369)
13.1%
51,320
(7,658)
12.1%
58,266
(712)
EBITDA margin
0.00%
54,608
(4,369)
-0.50%
47,479
(11,499)
0.50%
61,738
2,761
Perpetuity growth factor
3.00%
54,608
(4,369)
2.50%
51,485
(7,493)
3.50%
58,076
(902)
Net working capital (%/sales)
0.0pp
54,608
(4,369)
-0.5pp
55,406
(3,571)
+0.5pp
53,811
(5,167)
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
23
11. BORROWINGS
Interest rate, %
Maturity
31
December
2024
31
December
2023
Short-term borrowings
Current portion of the long-term bank
loan
EURIBOR 3M +
relevant spread
6 years from
each withdrawal
7,496
7,765
Total current borrowings
7,496
7,765
Long-term borrowings
Long-term portion of the bank loan
EURIBOR 3M +
relevant spread
6 years from
each withdrawal
6,717
14,156
Loan from related parties (including
accrued interest) (Note 19)
EURIBOR 3M +
relevant spread
Within 5 years
from contract
signing date
24,139
22,165
Total long-term borrowings
30,856
36,321
Total borrowings
38,352
44,086
The Company has received a multicurrency long term credit facility from its subsidiary US FOOD
NETWORK SA, with term extension option, the maximum limit being EUR 20 million. The credit facility
is valid until March 2027 and does not contain covenants or other special terms. The interest is payable
at the end of the contract, together with the principal balance. The balance of the loan as at December
31, 2024 is RON 24,139 thousand (RON 22,165 thousand as at December 31, 2023).
The Company is part of a credit facility from Alpha Bank Romania signed jointly by the Company and
its Romanian subsidiaries. The financing facilities with Alpha Bank, which may be used by the
Company, consist of an uncommitted long term credit facility in maximum amount of EUR 42,167,000
for the development of new locations and financing of the foreign subsidiaries, out of which it is used
as at December 31, 2024 the amount of EUR 27,270 thousand. The value used by the Company as at
December 31, 2024 is RON 14,213 thousand (RON 21,951 thousand as at December 31, 2023). The
loan facilities are secured with property, plant and equipment of restaurant locations for which the credit
limited has been utilised, pledge on business goodwill, pledge on current accounts opened with the
bank, promissory notes issued, pledge on receivables from and shares owned by the Group in its
Moldova and Italia subsidiaries.
An uncommitted short-term facility agreement signed in June 2024 with Citibank Europe PLC Dublin –
Romania Branch by Sphera Franchise Group SA and USFN Romania, as Borrowers, in total amount
of EUR 3,500,000, to be used by the borrowers for issuance of letters of guarantee for borrowers’ use
or on behalf of other Group entities. The facility is secured with a movable mortgage on the bank
accounts of the borrowers opened at the Bank. As of 31 December 2024, it was used for issuance of
guarantee letters the amount of RON 6,075 thousand, equivalent of EUR 1,221 thousand.
During the year 2024, the Company has ended the borrowing arrangement with Vista Bank Romania.
The revolving short-term loan facility of RON 10 million was contracted in May 2020 and it was intended
to finance working capital requirements, general corporate expenses, intragroup loans, and the
issuance of letters of guarantee. In June 2023, the term of the loan facility was extended until 30 June
2024, with no further extensions thereafter. As of 31 December 2023, the outstanding loan balance
with Vista Bank was nil.
Covenants
The borrowing arrangements of the Group with Alpha Bank and Citi Bank contain several covenants,
mainly of quantitative nature, out of which the most important relates to the ratio bank net debt,
including non-cash loan utilized for letter of guarantee / EBITDA at a consolidated level, excluding the
impact of IFRS 16, which should not exceed at any point in time 2.5. Breaches in meeting the financial
covenant at Group consolidated level would permit the banks to call the loan amount needed to meet
the financial covenant. There have been no breaches of the consolidated financial covenant for the
years ended 31 December 2024 and 31 December 2023.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
24
11. BORROWINGS (continued)
Information related to cash flows from financing
The following table shows a reconciliation of the changes in liabilities arising from financing activities:
31
December
2023
Non-cash changes
Cash changes
31
Decemb
er 2024
Interest accrual
Bank
charges
related to
financing
Deferred
bank
charges
recognized
in the
period
Foreign
exchange
gains/losses
Drawings
Repayments
Interest
paid
Bank
charge
s paid
Borrowings
44,086
3,377
31
-
23
-
(7,714)
(1,421)
(30)
38,352
Bank loans
21,921
1,402
31
-
24
-
(7,714)
(1,421)
(30)
14,213
Loans from related
parties
22,165
1,975
-
-
(1)
-
-
-
-
24,139
31
December
2022
Non-cash changes
Cash changes
31
December
2023
Interest
accrual
Bank
charges
related to
financing
Deferred
bank
charges
recognized
in the
period
Foreign
exchange
gains/losses
Drawings
Repayments
Interest
paid
Bank
charges
paid
Borrowings
64,502
3,705
56
-
151
-
(20,392)
(3,921)
(15)
44,086
Bank loans
35,019
2,072
56
-
102
-
(13,292)
(2,021)
(15)
21,921
Loans from related parties
29,483
1,633
-
-
49
-
(7,100)
(1,900)
-
22,165
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
25
12. LEASE LIABILITIES
The Company has lease contracts for administrative premises, motor vehicles and equipment used in its
operations. Leases for administrative premises have a lease term between 3 and 10 years, while motor
vehicles and other equipment generally have lease terms between 3 and 5 years.
The Company has leases of certain office equipment (i.e. printing and photocopying machines) that are
considered of low value. The Group applies the “short-term leases” and “lease of low-value assets”
recognition exemptions for these leases.
Set out below are the carrying amounts of right-of-use assets recognized and the movements during the
period:
Freehold buildings
Motor vehicles and
other equipment
Total
As at 1 January 2023
3,122
1,475
4,597
Additions
158
1,093
1,251
Depreciation expense
650
646
1,296
As at 31 December 2023
2,630
1,922
4,552
Additions
40
1,111
1,151
Depreciation expense
666
674
1,340
Disposals
-
299
299
As at 31 December 2024
2,004
2,060
4,064
Set out below are the carrying amounts of lease liabilities and the movements during the period:
As at 1 January 2024
4,975
Additions
1,151
Accretion of interest
188
Payments (principal and interest)
1,559
Disposals
299
(Unrealized) forex exchange gain
(1)
As at 31 December 2024
4,455
Current
1,416
Non-current
3,039
As at 1 January 2023
5,024
Additions
1,251
Accretion of interest
180
Payments (principal and interest)
1,557
(Unrealized) forex exchange gain
77
As at 31 December 2023
4,975
Current
1,240
Non-current
3,735
The following are the amounts recognized in profit or loss:
2024
2023
Depreciation expense of right-of-use assets
1,340
1,296
Interest expense on lease liabilities
188
180
Forex exchange differences, net
-
77
Expense relating to short-term leases and leases of low value assets
113
80
Total amount recognized in profit or loss
1,641
1,633
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
26
13. FINANCIAL INSTRUMENTS RISK MANAGEMENT
The Company’s principal financial liabilities comprise a bank loan, lease liabilities, a loan from a subsidiary
and trade and other payables. The main purpose of these financial liabilities is to finance the Company’s
operations.
The Company’s financial assets are represented by investments in subsidiaries, trade and loans and other
receivables, and cash and cash equivalents that derive directly from its operations.
The Company is exposed to interest rate risk, foreign exchange rate risk, credit risk and liquidity risk. The
Company’s senior management oversees the management of these risks, setting up the appropriate
financial risk governance framework for the Company. The Company’s senior management ensures the
Company’s financial risk activities are performed under appropriate procedures and that financial risks are
identified, measured and managed in accordance with the Company's policies and risk objectives.
The Company’s financial policies for managing the main financial risks with the objective to limit the
negative impact on the Company’s financial results are summarised below:
Interest rate risk
The Company’s income and operating cash flows are substantially independent of changes in market
interest rates. Trade and other receivables and payables are non-interest-bearing financial assets and
liabilities. The borrowings are usually exposed to interest rate risk through market value fluctuations of
interest-bearing long-term and short-term credit facilities. Interest rate on the Company’s debt finance from
bank and Group companies is variable and mirror, as a natural hedge, the variable interest rate for financing
offered to Group companies. In connection to loans granted or obtained from related parties, management
policy is to resort mainly to variable rate financing. However, at the time of rising or granting new loans or
borrowings management shall use its judgment to decide whether it believes that fixed or variable rate
would be more favourable to the Company over the expected period until maturity.
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on loans
and borrowings, both received from banks and related parties and granted to related parties. With all other
variables held constant, the Company’s profit before tax and equity are affected through the impact on
floating rate borrowings, as follows:
Increase in basis
points
Effect on profit
before tax
31 December 2024
EUR
1%
(92)
31 December 2023
1%
(441)
EUR
The Company does not hedge its interest rate risk.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign
exchange rates relates primarily to the Company’s financing activities, as the financing contracted by the
Company is Euro based. The vast majority of revenues and expenses, trade and other receivables and
payables is in RON. Part of the loans granted to related parties are denominated in EUR. Natural hedging
occurs from the Company’s financing activities, as the Company grants loans to its subsidiaries in the same
currencies in which the funds are obtained from the bank.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
27
13. FINANCIAL INSTRUMENTS RISK MANAGEMENT (continued)
The Company monitors the currency risk by following changes in exchange rates in currencies in which its
intercompany balances and external debts are denominated. The Company does not have formal
arrangements to mitigate its currency risk.
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in the EUR exchange
rate. The Company’s exposure to foreign currency changes for all other currencies is not material. With all
other variables held constant the Company’s loss before tax and equity are affected as follows:
Increase in
Effect on profit before
tax
EUR rate
31 December 2024
1%
(76)
31 December 2023
1%
(261)
An equal decrease of the EUR rate would have the same effect but of opposite impact.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The carrying amount of trade and other receivables, plus balances with
banks, plus the loans and receivables from related parties (Note 19), represent the maximum amount
exposed to credit risk.
The Company collaborates with highly reliable financial institutions. The majority of cash is transacted
through and placed with Alpha Bank Romania, member of Unicredit Group since November 2024, BRD–
SGS, a member of Societe Generale Group, Vista Bank Romania and Citi Bank Romania. The long-term
credit rating of Alpha Bank Romania and BRD is Baa1, as provided by Moody’s rating agency. The long-
term credit rating of Vista Bank (Vista Bank Global) has a B+ rating granted by Fitch Agency.
The long-term credit rating of Citibank Europe PLC is Aa3 as provided by Moody’s rating agency, no specific
credit rating being available for its Romanian branch.
As at 31 December 2024, 99% of cash and cash equivalents are placed at the bank institutions rated B+.
The remaining cash balance of the Company up to 100% is represented by cash in transit.
As at 31 December 2023, 100% of cash and cash equivalents are placed at the bank institutions rated B+.
Liquidity risk
The Company has adopted a prudent financial liquidity management approach, assuming that sufficient
cash and cash equivalents are maintained, and that further financing is available from guaranteed funds
from credit lines. The tables below summarize the maturity profile of the Company’s financial liabilities,
including principal amounts and interests according to contractual terms, at 31 December 2024 based on
contractual undiscounted payments.
31 December 2024
On
demand
Less
than 3
months
3 to 12
months
1 to 5
years
> 5
years
Total
Borrowings
33
2,154
6,030
33,628
-
41,845
Lease liability
-
372
1,116
3,101
-
4,589
Trade and other
payables
300
1,404
2
-
-
1,706
Total:
333
3,930
7,148
36,729
-
48,140
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
28
13. FINANCIAL INSTRUMENTS RISK MANAGEMENT (continued)
31 December 2023
On
demand
Less
than 3
months
3 to 12
months
1 to 5
years
> 5
years
Total
Borrowings
52
2,345
6,817
40,909
-
50,123
Lease liability
-
324
973
3,866
-
5,163
Trade and other
payables
179
1,111
-
-
-
1,290
Total:
231
3,780
7,790
44,775
-
56,576
At 31 December 2024, the Company had available RON 74,101 thousand from the bank credit facility with
Alpha Bank (2023: RON 76,181 thousand), thus being able to respond to any unforeseen higher cash
outflow needs.
Capital management
Capital includes the equity attributable to the Company’s shareholders.
The primary objective of the Company’s capital management is to ensure that it maintains a strong credit
rating and healthy capital ratios in order to support its business and maximise shareholder value.
The Company manages its capital structure and makes adjustments to it in light of changes in economic
conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to
shareholders, return capital to shareholders or issue new shares.
The Company may monitor capital using a gearing ratio, which is net debt divided by total capital plus net
debt. The Company does not have a target gearing ratio, as the overall gearing is low. The ratio is not a
financial indicator defined by IFRS Accounting Standards The Company includes within net debt, interest
bearing loans and borrowings, lease liabilities, financial trade and other payables, less cash and cash
equivalents.
31 December
2024
31 December
2023
Borrowings
38,352
44,086
Lease liabilities
4,455
4,975
Financial trade and other payables
1,706
8,060
Less: cash and cash equivalents
12,456
2,897
Net debt
32,057
54,224
Equity
691,991
687,674
Capital and net debt
724,048
741,898
Gearing ratio:
4.4%
7.3%
Fair values
The Company has no financial instruments carried at fair value in the statement of financial position.
The carrying amount of the interest-bearing loans and borrowings and receivables from loans granted to
related parties approximates their fair value (level 3 measurement).
Financial instruments which are not carried at fair value on the statement of financial position also include
trade and other receivables, cash and cash equivalents, and trade and other payables. The carrying
amounts of these financial instruments are considered to approximate their fair values (level 3
measurement).
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
29
14. TRADE AND OTHER RECEIVABLES
31 December
2024
31 December
2023
Trade receivables from related parties (Note 19)
20,773
17,804
Dividends to be received (Note 19)
1,080
21,149
Loans to related parties (Note 19)
29,168
24,260
Interest accrual from loans to related parties (Note 19)
7,797
5,881
Other receivables
1,867
331
Total
60,685
69,425
Less non-current portion:
Loans to related parties (Note 19)
29,168
24,260
Interest accrual from loans to related parties (Note 19)
7,797
5,881
Other receivables
51
51
Total
37,016
30,192
Trade and other receivables, current
23,669
39,233
Terms and conditions relating to related party transactions are described in Note 19.
Trade receivables are non-interest bearing and are generally on terms of 15 – 30 days.
As of 31 December 2024, other receivables include the amount of RON 1,575 thousand representing cash
paid to the Company’s broker for the purpose of purchasing treasury shares, designated for the execution
of the share buyback program aimed at reducing the share capital, in accordance with EGMS Resolution
no. 3 dated 26.04.2024 (Note 16).
As at 31 December 2024 and 31 December 2023, the ageing analysis of trade receivables from related
parties, net of allowances, is, as follows:
Trade receivables
31 December 2024
Total
Current
Days past due
< 30 days
30-60 days
61-90 days
>91 days
Expected credit loss rate
0%
0%
0%
0%
0%
Estimated total gross carrying
amount at default
20,773
4,515
156
1,373
314
14,415
Expected credit loss
-
-
-
-
-
-
Trade receivables
31 December 2023
Total
Current
Days past due
< 30 days
30-60 days
61-90 days
>91 days
Expected credit loss rate
0%
0%
0%
0%
0%
Estimated total gross carrying
amount at default
17,804
10,300
-
3,561
573
3,370
Expected credit loss
-
-
-
-
-
-
For the receivables above, as well as for the loans attributed to related parties, the Group's considers the
probability of losses being remote (Note 19).
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
30
15. CASH AND CASH EQUIVALENTS
31 December
2024
31 December
2023
Cash at banks and on hand
2,361
2,897
Cash in transit
61
-
Short-term deposits
10,034
-
Total
12,456
2,897
As part of the financing agreements with Alpha Bank and Vista Bank, the Company has pledged the cash
available in the accounts opened with the banks. The balance of the pledged bank accounts as at 31
December 2024 is of RON1,919 thousand (31 December 2023: RON 2,552 thousand).
16. ISSUED CAPITAL
31 December
2024
31 December
2023
Authorised shares
Ordinary shares of 15 RON each
38,799,340
38,799,340
Share capital (RON thousand)
581,990
581,990
As at 31 December 2024, Sphera Group held 122,902 own treasury shares, representing 0.317% of the
share capital (31 December 2023: 104,100 own treasury shares, representing 0.268%).
Buyback programs (one program for the reduction of the share capital and one program for share option
plan)
In accordance with the decisions of the General Meetings of Shareholders, the Group executed two
buyback programs through market operations: one program was aimed at implementing the share option
plan, while the other was focused on reducing the share capital by canceling the redeemed shares. As of
December 31, 2024, the Group held a total number of 122,902 own treasury shares for these purposes.
The average buyback price was RON 38.9694 per share, with the full price paid for the buyback shares
repurchased amounting to RON 4,789 thousand.
The buyback program for reduction of the share capital was ongoing as of 31 December 2024.
Shareholding structure
The shareholders of the Company as at 31 December 2024 are: Shaletia Ventures LTD (29.5466%),
Computerland Romania SRL (20.5327%), Wellkept Group SA (17.0739%) and free float – own shares
included (32.8468%). During December 2024, all the shares held by Tatika Investments Ltd were
transferred to Shaletia Ventures LTD.
The shareholders of the Company as at 31 December 2023 are: Tatika Investments Ltd. (29.5466%),
Computerland Romania SRL (20.5327%), Wellkept Group SA (17.0739%) and free float – own shares
included (32.8468%).
17. PROFIT DISTRIBUTION
2024
2023
Total dividends declared during the period
81,443
44,886
Total dividends declared per share SFG (RON/share)
2.10
1.16
Gross Dividends paid during the period to shareholders
81,443
64.887
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
31
17. PROFIT DISTRIBUTION (continued)
In 2024, the Company paid two separate payments of dividends to its shareholders, totalling RON 81,443.
These distributions were authorised during the Ordinary General Shareholders Meetings held on April 26
th
,
2024, and November 7
th
, 2024. The gross dividend per share for each tranche was set at RON 1.05.
On September 4th, 2023, the Ordinary General Meeting of the Shareholders of the Company approved a
dividend distribution in amount of RON 45,007 thousand, fixing a gross dividend per share at RON 1.16.
Considering the 104,100 shares acquired by the Group during the SOP program which were not eligible
for dividends, the amount of RON 120 thousand was withheld from the distribution. Based on the gross
dividend per share of RON 1.16, the value of distribution was of RON 44,886 thousand.
The proposal for the allocation of profit for the financial year ended December 31, 2024 to be approved at
the general shareholders’ meeting is detailed in Note 22 Events after the reporting period.
Proposed dividends on ordinary shares, subject to approval at the annual general meeting, are not
recognised as a liability as at 31 December.
18. TRADE AND OTHER PAYABLES
31 December
2024
31 December
2023
Trade payables
1,147
1,241
Trade and other payables to related parties (Nota 19)
523
34
Salary liability
5,315
5,113
Social contribution liability
969
891
Other employee related liabilities
187
173
Other payables
35
14
VAT payable
345
583
Dividends payables
-
11
Total
8,521
8,060
Trade payables are non-interest bearing and are normally settled on 15-day terms. For terms and
conditions relating to related parties, refer to Note 19.
19. RELATED PARTY DISCLOSURES
During the year ended 31 December 2024 and 31 December 2023, respectively, the Company has carried
out transactions with the following related parties:
Related party
Nature of the
relationship
Country of
incorporation
Nature of transactions
US Food Network SA
Subsidiary
Romania
Dividends, loan received,
sale of services,
acquisition of goods and
services
American Restaurant System
SA
Subsidiary
Romania
Sale of services, loan
provided, acquisition of
goods and services, VAT
tax group
California Fresh Flavors SRL
Subsidiary
Romania
Loan provided, sale of
services
US Food Network SRL
Subsidiary
Republic of
Moldova
Dividends, loan provided
US Food Network SRL
Subsidiary
Italy
Loan provided, sale of
services
Arggo Software Development and
Consulting SRL
Entity affiliated to a
shareholder of the parent
Romania
IT services
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
32
Related party
Nature of the
relationship
Country of
incorporation
Nature of transactions
Wellkept Group SA
Shareholder and entity
under common control of
Radu Dimofte, ultimate
controlling party of Sphera
Romania
Rent training center and
payment of dividends
Tatika Investments Ltd.
Shareholder (until
December 2024) and
entity under common
control of Radu Dimofte,
ultimate controlling party
of Sphera
Cyprus
Payment of dividends
Shaletia Ventures Ltd.
Shareholder (from
December 2024) and
entity under common
control of Radu Dimofte,
ultimate controlling party
of Sphera
Cyprus
No transactions in 2024
Computerland Romania SRL
Shareholder with
significant influence
Romania
Payment of dividends,
acquisition of IT
equipment, licenses
Midi Development SRL
Entity affiliated to
shareholders of the parent
Romania
Services
Moulin D'Or SRL
Entity affiliated to
shareholders of the parent
Romania
Acquisition of goods
Parc Hotels SA
Entity affiliated to a
shareholder of the parent
Romania
Accommodation services
Elicom SRL
Entity affiliated to a
shareholder of the parent
Romania
Call-center services
The following table provides the total amount of transactions that have been entered into with related parties
for the relevant period:
31 December 2024
Dividends
revenues
Revenues
from
service
contracts to
related
parties
Purchases
(without
VAT) from
related
parties
Amounts
owed by
related
parties
Amounts
owed to
related
parties
Related party
US Food Network SA
89,722
33,851
38
11,000
28
US Food Network SRL
(Moldova)
2,160
-
-
-
-
American Restaurant System
SA
-
4,407
18
10,100
386
California Fresh Flavors SRL
-
2,602
6
580
1
US Food Network SRL (Italy)
2,143
1,619
-
173
-
Computerland Romania SRL
-
-
40
-
-
Moulin D’Or SRL
-
-
3
-
-
Midi Development SRL
-
-
61
-
65
Wellkept Group SA
-
-
493
-
17
Arggo Software Development
and Consulting SRL
-
-
275
-
22
Elicom SRL
-
-
15
-
4
Parc Hotels SA
-
-
1
-
-
Loans and interest from related
parties
-
-
1,975
-
24,139
Loans and interest to related
parties (please see below)
-
1,965
-
36,965
-
94,025
44,444
2,925
58,818
24,662
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
33
19. RELATED PARTY DISCLOSURES (continued)
In addition to the revenues presented in the statement of comprehensive income, sales from service
contracts to related parties also include reinvoices of direct costs that did not pass through profit or loss, in
total amount of RON 233 thousand, respectively: US Food Network SA (RON 158 thousand), American
Restaurant System SA (RON 48 thousand), California Fresh Flavors SRL (RON 27 thousand).
31 December 2023
Dividends
revenues
Revenues
from
service
contracts to
related
parties
Purchases
(without
VAT) from
related
parties
Amounts
owed by
related
parties
Amounts
owed to
related
parties
Related party
US Food Network SA
71,469
31,927
4
33,379
3
US Food Network SRL
(Moldova)
1,534
-
-
3
-
American Restaurant System
SA
-
4,815
3
4,963
-
California Fresh Flavors SRL
-
2,395
1
473
-
US Food Network SRL (Italy)
-
1,642
-
135
-
Computerland Romania SRL
-
-
10
-
9
Moulin D’Or SRL
-
-
1
-
-
Midi Development SRL
-
-
70
-
-
Wellkept Group SA
-
-
494
-
19
Arggo Software Development
and Consulting SRL
-
-
208
-
-
Elicom SRL
-
-
20
-
3
Loans and interest from related
parties
-
-
1,633
-
22,165
Loans and interest to related
parties (please see below)
-
1,428
-
30,141
-
73,003
42,207
2,444
69,094
22,199
Terms and conditions of transactions with related parties
The sales to and purchases from related parties are made at terms equivalent to those that prevail in arm’s
length transactions. Outstanding trade balances at the period end are unsecured, interest free and settled
in cash. There have been no guarantees provided or received for any related party receivables or payables.
For the year ended 31 December 2024, the Company has not recorded any impairment of receivables
relating to amounts owed by related parties. This assessment is undertaken each financial year by
examining the financial position of the related party and the market in which the related party operates.
The Company and American Restaurant System are registered as a tax group for VAT purpose. As at 31
December 2024, VAT payable amounts to RON 374 thousand (31 December 2023: VAT receivable of RON
128 thousand).
The balances with related parties comprise also loans receivables and payables, included in the Statement
of financial position under “Trade and other receivables” (Note 14) and “Borrowings” respectively (Note 11).
Interest income and interest expense and related accrued balances as well as the balances of the
intercompany loan receivables and payables are presented below:
Interest expense
2024
Interest payable
31 December 2024
Loan payable
31 December 2024
Related party
US Food Network SA
1,975
2,522
21,617
Total
1,975
2,522
21,617
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
34
Interest income
2024
Interest receivable
31 December 2024
Loan receivable
31 December 2024
US Food Network SRL (Italy)
1,825
7,706
24,258
US Food Network SRL (Moldova)
62
13
2,910
American Restaurant System SA
78
78
2,000
Total
1,965
7,797
29,168
Interest expense
2023
Interest payable
31 December 2023
Loan payable
31 December 2023
Related party
US Food Network SA
1,633
548
21,617
Total
1,633
548
21,617
Interest income
2023
Interest receivable
31 December 2023
Loan receivable
31 December 2023
US Food Network SRL (Italy)
1,428
5,881
24,260
Total
1,428
5,881
24,260
In 2024, the Company increased the investment in ARS with the amount of RON 116 thousand and the
investment in CFF with the amount of RON 309 thousand. At the same time, the impairment for the
investment with ARS was increased by 2,165 thousand (Note 10).
In 2023, the Company increased the investment in ARS with the amount of RON 9,333 thousand and the
investment in CFF with the amount of RON 4,100 thousand by converting the existing shareholder’s debts
to equity (Note 10).
As of December 31, 2024, the Company has granted long-term intercompany loans to US Food Network
Srl (Italy), California Fresh Flavors SRL, both contracts being valid until 2028, and American Restaurant
System and US Food Network SRL (Moldova) with contracts valid until 2027. All intercompany loans bear
a variable rate of EURIBOR 3m+ margin, payable at the end of the contract, together with principal.
The contract with US Food Network SRL (Moldova) in amount of EUR 595 thousand was signed in June
2024 to support restaurant network development and has a balance of RON 2,910 thousand as of
December 31, 2024.
American Restaurant System used in 2024 RON 2,000 thousand from the available financing facility for
sustaining the operational activity.
US Food Network SRL (Italy) has an outstanding of loan balance of RON 24,258 thousand as of December
31, 2024.
As of December 31, 2024, and December 31, 2023, CFF has not utilized the available financing from the
parent company.
All intercompany loan balances and accrued interest at the end of reporting period are detailed above.
Refer to Note 20 for the related value of undrawn borrowing facilities.
Total gross dividends paid in 2024 to the Company’s shareholders were RON 81,443 thousand (Note 17).
Total gross dividends paid in 2023 were of RON 64,887 thousand, including the dividends declared and
approved by the General Shareholders Meeting in December 2022 and paid in March 2023 of RON 0.5155/
ordinary share amounting to RON 20,001 thousand and the dividends declared in 2023 of RON
1.16/ordinary share, representing RON 44,886 thousand.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
35
19. RELATED PARTY DISCLOSURES (continued)
Compensation of key management personnel of the Company:
2024
2023
Short-term employee benefits
7,266
8,156
Total compensation paid to key management personnel
7,266
8,156
The amounts disclosed in the table are the amounts recognised as an expense during each reporting
period.
Share-based remuneration and buyback program
The Company has in place a share option plan for senior executives, part of their variable remuneration
being granted in shares of the parent company with a vesting period of one year from the date of grant.
For the year ended December 2024, the share - based payment expense included in Payroll and employee
short-term benefits amounted to RON 1,404 thousand (2023: RON 1,856 thousand).
As of 31 December 2024, the Company has an equity reserve related to the share-based remuneration in
amount of RON 3,685 thousand (31 December 2023: RON 3,894 thousand) for the qualifying variable
remuneration. The reserve includes the value of RON 425 thousand, representing the reserves for shares
to be granted to the executive management of the subsidiaries, as part of the group’s SOP.
In 2024, SFG allocated 104,100 free shares with a total value of RON 2,037 thousand to the executive
directors of the Company, for SOP related to 2021 and 2022. This allocation was made by offsetting the
“Treasury shares” against the related “Reserves for share-based remuneration”.
For the Stock Option Plan related to 2023, in accordance with EGSM resolution no.2/26.04.2024, the
Company initiated the first stage of the share buyback program in June 2024, the shares acquired being
outstanding as of December 31, 2024 (please refer to Note 16).
The own equity instruments that were acquired (treasury shares) were recognized at cost and deducted
from equity. No gain or loss was recognized in profit or loss on the purchase, the difference between the
purchase price and the fair value at the date of grant being recognized in equity as a gain or loss related to
the acquisition of the treasury shares (RON 487 thousand).
20. COMMITMENTS AND CONTINGENCIES
Borrowing facilities granted to related parties
At 31 December 2024, the value of the undrawn borrowing facilities granted to related parties was of RON
72,279 thousand (31 December 2023: RON 74,286 thousand).
Bank letter of guarantees
The Company has issued bank letters of guarantee in favour of suppliers as at 31 December 2024 in
amount of RON 343 thousand.
Climate change
In the context of climate change and increasingly stringent sustainability requirements, the Sphera Group
conducted an analysis integrating the evaluation of climate-related risks and opportunities developed on
recommendations issued by the Task Force on Climate-related Financial Disclosure (TCFD).
The analysis covers the Group's own operations, including restaurants in Romania, Italy, and the Republic
of Moldova, as well as its value chain, encompassing suppliers of raw materials and services.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
36
20 COMMITMENTS AND CONTINGENCIES (continued)
To adapt its strategy and business model to climate change, through a series of clear measures, the Sphera
Group implemented quick solutions to reduce energy consumption in the short term, such as the complete
transition to LED lighting by 2024. In the medium term, planned programs include investments in green
technologies and the modernization of HVAC (Heating, Ventilation, and Air Conditioning) and energy
management systems.
In the long term, the Sphera Group plans its portfolio of products and services according to market
requirements for sustainability, while ensuring the workforce retraining to adapt to new operational
demands. Long-term contractual relationships with suppliers, source diversification, and the
implementation of more energy-efficient processes contribute to stability and maintaining accessible capital
costs. For each material topic, associated impacts, risks, and opportunities have been analyzed to guide
the long-term strategy and business model concerning climate change.
Further details about climate change strategy and energy efficiency are presented in the Group’s
Sustainability report.
Contingencies
Taxation
The interpretation of the text and practical implementation procedures of the tax regulations could vary, and
there is a risk that certain transactions could be viewed differently by the tax authorities as compared to the
Company's treatment.
The Romanian tax legislation was subject to significant changes and contradictory interpretations, which
may apply retroactively. Moreover, in practice, the tax authorities can take a strong approach and assess
additional tax liabilities and related late payment penalties based on their individual interpretations of the
tax legislation. As a result, penalties and delay payment interest could result in a significant amount payable
to the state.
Contingent liabilities may arise in relation to additional tax assessments that may be imposed by the tax
authorities as a result of reviews performed. Corporate tax returns can be subject to review by tax
authorities within a 5-year period in Romania.
Transfer pricing
According to the applicable relevant tax legislation in Romania, the tax assessment of related party
transactions is based on the concept of market value for the respective transfers. Following this concept,
the transfer prices should be adjusted so that they reflect the market prices that would have been set
between unrelated companies acting independently (i.e. based on the “arm’s length principle”). It is likely
that transfer pricing reviews will be undertaken in the future in order to assess whether the transfer pricing
policy observes the “arm’s length principle” and therefore no distortion exists that may affect the taxable
base of the taxpayer in Romania.
The Company has prepared transfer pricing files.
21. AUDITOR’S FEES
The auditor of the Company is Ernst & Young Assurance Services SRL.
The fee for the statutory audit of the consolidated and standalone financial statements as of 31 December
2024 of the Company prepared in accordance with MOF 2844/2016 and of the statutory audit of the financial
statements as of 31 December 2024 of US Food Network SA, American Restaurant System SA and
California Fresh Flavors in accordance cu MOF 1802/2014 and of the statutory audit of US Food Network
Srl Italy and the limited review procedures of the sustainability reporting was of RON 980 thousand
(excluding VAT).
Other non-assurance services amounted RON 38 thousand (excluding VAT) in connection with the
procedures performed by the audit company for the Group’s year-end related parties’ reports, prepared in
accordance with the stock exchange regulations.
SPHERA FRANCHISE GROUP SA
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
All amounts in RON thousand, unless specified otherwise
37
22. EVENTS AFTER THE REPORTING PERIOD
Proposed profit allocation for the financial year 2024
For the year ended 31 December 2024, the Board of Directors has proposed to the shareholders’ approval,
the following allocation of the net profit of the Company in amount of RON 88,720 thousand:
- Setting up the legal reserves in accordance with the statutory regulations in amount of RON 4,437
thousand.
- Covering the loss related to the acquisition of treasury shares of RON 487 thousand.
- Allocation of undistributed profit of RON 83,793 thousand to retained earnings.
Also, the Board of Directors has proposed to the shareholders’ approval the distribution of a gross dividend
of RON 1.09 per share from the undistributed profit (2023 and 2024) of the Company.
Reduction of share capital
The Board of Directors has proposed to the shareholders’ approval the reduction of the share capital of the
Company, from RON 581,990,100 to RON 580,101,930, representing a decrease of RON 1,888,170,
following the cancellation of 125,878 own shares acquired by the Company for this purpose, in accordance
with the decision of EGSM no. 3/26.04.2024. After the reduction, the share capital will be RON 580,101,930,
divided into 38,673,462 shares.
These separate financial statements from page 2 to page 37 were approved by the Board of Directors and
were authorised for issue on 25 March 2025.
Chief Executive Officer Chief Financial Officer
Calin Ionescu Valentin Budes
